Loss of ‘pink slime’ filler likely to drive up hamburger prices

The social media-driven frenzy that caused supermarket chains and fast food purveyors to quit using so-called “pink slime” beef additives will likely drive up hamburger prices further, cattle traders and a supermarket spokeswoman said Tuesday.

“The industry is telling us that the removal of this filler is the equivalent of losing 1.5 million head of cattle, and cattle already are in tight supply,” said Hy-Vee spokeswoman Ruth Comer. Hy-Vee is pulling ground beef with the “lean finely textured trimmings,” also referred pejoratively as “pink slime” from its shelves.

Comer said industry guesses on hamburger price increases range from 3 cents per pound to 25 cents per pound. Hamburger prices already have risen by 70 cents per pound, about 25 percent, in the 24 months since February, 2010 because of tight U.S. cattle supplies.

Beef Products International of Dakota Dunes, S.D., said it was closing three of its four plants at least temporarily after a firestorm erupted on social media in the month over “pink slime,” the lean beef additives made from scraps at slaughterhouses.

Although there have been no reported cases of illness or disease traced to the product, a collective revulsion factor fed by postings on Facebook, You Tube and an ABC News series prompted the withspread halt to use of a product that has been on supermarket meat counters since the early 1990s.

“It’s crazy,” said Des Moines meat wholesale Phil Barber of Brewer Meats, which he said has not knowingly used meat with the filler. Barber nonetheless said of the fillings, “they’re free of e-coli, and they’re 95 percent fat free.”

Nonetheless, the futures prices for slaughter-ready cattle rose by $1.05 per hundredweight to $125.60 Tuesday on the Chicago Board of Trade. Younger feeder cattle were up $1.47 per hundredweight to $154.02.

The rise in cattle prices Tuesday came after several days of price pullbacks from record levels, as traders and retailers worried that high beef prices would erode consumer demand as the all-important summer grilling season approaches.

“There had been a pullback in prices, but the news about the beef trimmings probably is bullish for cattle in the long run,” said commodity trader Jeff French of Top Third Ag Marketing in Chicago.

Commodity trader Dennis Smith of Archer Financial Services in Chicago suggested that the cutback in the use of the beef trimmings will make beef supplies even tighter, and added that the consumer revulsion may hit their pocketbooks.

“Long term the refusal by consumers to use this product (lean finely textured beef) will make less beef available and force prices higher. If that’s what the consumer wants, that’s what they’ll get,” Smith said.

BPI purchases the trimmings, or scraps from the packinghouse cutting process, and makes it into a filler of up to 15 percent of total volume in ground beef products. The process has been approved by the U.S. Food and Drug Administration since the early 1990s and scarcely raised an eyebrow until last week when the social media went viral over its depiction as “pink slime.”

The name was given by an U.S. Department of Agriculture official but has taken off due to the postings of Food Network chief Jamie Oliver, who along with others has posted on YouTube and various other social media.

In the traditional media, ABC News ran a series of reports earlier this month, which widely disseminated the “pink slime” moniker.

“This shows the impact of the social media,” said Kevin Concannon, former director of the Iowa Department of Human Services and now Under Secretary for Food, Nutrition and Consumer Services at the U.S. Department of Agriculture. “There is absolutely no evidence that this product is unsafe, and it is low-fat.”

Nonetheless, Concannon’s office last week told the nation’s schools that if they wished to stop using beef with pink slime they were free to do so. Those schools joined most of the nation’s major supermarket and hamburger chains in dumping the product.

Like most meat processing, the process of making “finely textured beef” is not particularly appetizing to watch. It involves taking the scraps from the meat cutting process, running it through a heat and centrifuge process and then giving it a bath in ammonia to kill potential E Coli and salmonella.

The term “pink slime” came from an e-mail from a former U.S. Department of Agriculture microbiologist, Gerald Zirnstein and subsequently showed up in various media reports, most notably on ABC News and then went viral on social media.

An online petition drive based in Houston has gathered more than 250,000 signatures asking that the product be pulled from retail outlets and school lunch programs.

The beef industry reacted by noting the impact on lost jobs, including 220 at the closed BPI plant in Waterloo where the workers were told they would get 60 days pay. BPI also shuttered plants in Garden City, Kan. and Amarillo, Tx.

“While lean finely textured beef was given a catchy and clever nickname in ‘pink slime,’ the impact of alarming broadcasts about this safe and wholesome beef product by Jamie Oliver, ABC News and others are no joke to those families that are now out of work,” said American Meat Institute President J. Patrick Boyle in a written statement.

Cattle and beef prices soared last year because cattle herds, already at their lowest levels since 1952, were hit hard last year by the drought on the big rangelands of Texas and Oklahoma.

Combined with a surge in U.S. exports, cattle prices increased by 25 percent to record levels in late 2011 and early this year. The result was an increase in retail hamburger prices of as much as 20 percent last year, according to USDA surveys.

Any increase in beef prices would reverse what has been a gradual softening of beef prices in the last month due to what Smith and other traders have said has been rising consumer resistance to higher beef prices.

The latest figures from the USDA’s Livestock Marketing Information Center show that the beef slaughter ran 4.4 percent below a year earlier for the week ending last Saturday. The fresh “beef trimmings” that go into the textured beef/pink slime additive, were down in price by 19 percent through Monday as meat processors began to cut back on their purchases.

Iowa is the nation’s fifth largest cattle feeding state, with about 600,000 animals on feed. About 23,000 of Iowa’s 92,000 farms have cattle feeding operations.

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